Luxembourg households rank among the wealthiest in the EU, but a new study reveals that the richest 20% earn nearly five times as much as the poorest 20%, underscoring a stark income gap.

A new report on social cohesion from the National Institute of Statistics and Economic Studies (STATEC) presents a contrasting economic picture for households, revealing a high average income alongside persistent and significant inequality.

Published on Wednesday, the 2025 report confirms trends highlighted in recent studies, which have warned of a growing "working poor" class and the financial vulnerability of many residents. While STATEC notes "an improvement in purchasing power despite inflation," it concludes that the nation's social fabric is becoming more fragile.

According to the report, the average disposable income for Luxembourg households reached nearly €7,700 per month in 2024. However, the institute immediately highlights that "income inequalities remain pronounced," with the wealthiest 20% of the population enjoying a standard of living 4.7 times higher than the poorest 20%.

The official at-risk-of-poverty rate stands at 6.1%. This figure soars to 26.9% after accounting for pre-committed expenses.

Pension disparities and an aging workforce

The report also sheds light on challenges related to an aging population, noting that one in four pensioners receives a payment below the legal minimum – a situation that disproportionately affects women and foreign nationals.

Simultaneously, STATEC documents a significant shift in workforce patterns. The employment rate for those aged 55 to 64 has surged by 57% over the past two decades, and the average length of a working life has increased from 30 to 35 years.

Despite this trend, the average effective retirement age in Luxembourg (60.4 years) remains below the European Union average (61.3 years). The report notes that "a significant portion of the population leaves the labour market before the legal age."

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